Immigrant Remittances Reduce Poverty and Hunger

The role of immigrant remittances (the money immigrants send home to their families) inreducing hunger and poverty in their home countries was one of the key points of the FAO report, The State of Food Insecurity in the World. The report points out that not only are remittances important to reducing hunger and poverty, in many cases they play a larger role in reducing poverty than foreign assistance.

In some countries, remittances now rival foreign direct investment in overall importance to the economy, and in the near future, this may be true of developing countries in general (see graphic above).

This is how the report’s executive summary describes the impact of remittances:

“Remittances, which have globally become three times larger than official development assistance, have had signi­ficant impacts on poverty and food security. This report suggests that remittances can help to reduce poverty, leading to reduced hunger, better diets and, given appropriate policies, increased on-farm investment.”

Remittances not only enable the families of people working outside the country to pay for the food, shelter, clothing, and health care they need, but in some cases have increased small-scale investment, including in agriculture. The State of Food Insecurity in the World reports that this is “particularly beneficial to growth where food production and distribution still rely on small-scale and local networks. This holds in particular for sub-Saharan African countries.”

Bread for the World Institute has analyzed the impact of remittances on poverty in Central America and the potential these resources hold for creating jobs and promoting economic development. Our analysis finds that it is useful for remittances to be complemented by development assistance programs that build capacity in recipient communities so that people can more effectively invest the money sent to them—including in agriculture and other food security efforts.

The FAO report emphasizes that there is no single solution to hunger. It will take a variety of strategies to eliminate hunger and poverty—development assistance, public-private partnerships, and indigenous economic development are only a few examples. But The State of Food Insecurity in the World highlights the key role of remittances—and immigration broadly—in reducing hunger and driving economic growth in both developing and developed nations.

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Bread for the World Institute provides policy analysis on hunger and strategies to end it. The Institute educates opinion leaders, policy makers, and the public about hunger in the United States and abroad. Bread for the World Institute is a 501(c)3 organization.